THIS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

GFI Oil & Gas Corporation (TSX VENTURE:GFI) ("GFI") announced today that it has entered into an arrangement agreement pursuant to which Salamander Energy plc (LSE:SMDR) ("Salamander") will indirectly acquire all of the issued and outstanding common shares of GFI in a transaction valued at approximately US$220 million, including the assumption of current debt outstanding. Under the terms of the arrangement agreement, GFI shareholders will receive, at their option, for each GFI share either (i) US$0.3129 in cash and 0.1573 of an ordinary share of Salamander or (ii) 0.218 of an ordinary share of Salamander; provided that the maximum aggregate amount of cash payable by Salamander pursuant to the arrangement is US$55 million. The offer represents a premium of approximately 30% over the closing price of GFI on the TSX Venture Exchange on December 12, 2007 and a premium of 62% over GFI's 10-day volume weighted average price.

Depending on the elections made by GFI shareholders under the arrangement, shareholders of GFI will hold in aggregate between 24% and 30% of the combined corporation. Salamander has agreed to recommend to its nomination committee that on completion of the transaction two nominees of GFI be appointed to the board of directors of Salamander.

In connection with the transaction, Salamander has agreed to provide credit facilities to GFI in an amount of up to US$56 million that GFI will use to fund certain development expenditures until the expected closing of the transaction, which is expected to occur in February 2008. GFI has also arranged for an additional standby facility of up to US$25 million from its current bridge lenders.

The board of directors of GFI has unanimously approved the proposed transaction and has unanimously concluded that the transaction is in the best interests of GFI and its shareholders. Directors and management of GFI, along with certain other shareholders together representing approximately 58.4% of the GFI common shares outstanding on a fully diluted basis, have entered into support agreements with Salamander pursuant to which they have agreed to vote their shares in favour of the proposed transaction.

The arrangement will be effected by way of a plan of arrangement under the Business Corporations Act (Alberta) and will be subject to the approval of 66 2/3% of the votes cast by GFI shareholders at a meeting to be held for the purpose of approving the transaction.

Completion of the transaction will be subject to certain other conditions including court and other regulatory approvals and certain other customary conditions for an agreement of this nature, as well as the approval of Salamander shareholders. The shareholder meetings for both companies are expected to be held in mid to late February 2008.

The arrangement agreement contains customary provisions prohibiting GFI from soliciting other combination proposals but allows the board of directors of GFI to accept and recommend a superior proposal if it is required to do so in accordance with its fiduciary duties. The arrangement agreement contains a mutual non-completion fee of US $4 million, which is payable in certain events. Salamander has the right to match any competing proposal for GFI in the event a superior proposal is made.

In certain circumstances, Salamander will have the option to purchase GFI's 35% working interest in the Kambuna development asset in Indonesia for US$45 million. If Salamander exercises its right to purchase the Kambuna asset, a non-completion fee will not be payable. To the extent the Kambuna call option is validly exercisable but not enforceable, the parties have also entered into a Right of First Refusal Agreement, pursuant to which GFI's wholly-owned subsidiary, Bualuang & Kambuna Holdings Inc., has granted Salamander a right of first refusal on any proposed disposition of the shares of Duinord Glagah Kambuna Inc. or its principal assets, which include GFI's interest in the Kambuna field. The Right of First Refusal Agreement has a term of 12 months.

BMO Capital Markets is acting as exclusive financial advisor to GFI with respect to the transaction and has provided an opinion to the board of directors that, subject to review of final documentation, the consideration to be received by the GFI shareholders in connection with the transaction is fair, from a financial perspective, to GFI shareholders.

About GFI

GFI is a public company listed on TSX Venture Exchange Inc. (symbol "GFI.V") with core interests in two offshore fields currently under development, the 104,000 acre Bualuang oilfield offshore Thailand (60%) and a 35% non-operated interest in the 83,000 acre Kambuna natural gas and condensates project located offshore northern Sumatra, Indonesia. GFI also holds a 22.5% working interests in the Seruway PSC a non-operated offshore licenses covering approximately 1,100,000 acres located offshore North Sumatra Indonesia.

About Salamander

Salamander is an independent upstream oil and gas exploration and production company focused on South East Asia. Since its formation, Salamander has built a balanced portfolio of production, development and exploration assets with interests principally located in Indonesia and Thailand. The Company listed on the main board of the London Stock Exchange in December 2006 under the symbol "SMDR", raising approximately Pounds Sterling 120 million of new funds. Salamander has a clear strategy of acquiring and developing high quality oil and gas producing assets that provide potential near-term value and cash flow growth, and of exploring in proven, but under-explored and overlooked frontier basins. Its current assets are located in South East Asian basins where Salamander believes it can further exploit its geological knowledge.

ADVISORY - This news release may contain forward-looking information based on assumptions that are subject to a wide range of business risks, including consummation of the plan of arrangement being dependent on the satisfaction of customary closing conditions, the approval of GFI's and Salamander's shareholders, and the approval of the Alberta Court of Queen's Bench. Forward-looking information typically contains statements with words such as "anticipate", "estimate", "expect", "potential", "could", or similar words suggesting future outcomes. We caution readers and prospective investors in GFI's's securities not to place undue reliance on forward-looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by GFI.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.